MANITOU SPRINGS – The Manitou Springs City Council voted Wednesday in favor of a new deal with the Cog Railway to provide tax relief to the Cog and revenue to the city.
The new agreement has several additional provisions following months of negotiations between the city and Anschutz Corp, the parent company of the Cog Railway and The Broadmoor.
- The city would allow the Cog Railway to essentially pay a flat 3.8 percent excise tax on all revenue from years 26 to 50 in the agreement
- When there are more than 375,000 riders in a calendar year, the Cog would pay the full 5 percent excise tax to the city
- The Cog would pay an additional voluntary payment to the city in 2020 due to delays with the Cog’s reopening date, (expected in 2021) to help the city with lost tax revenue
The Manitou Springs City Council approved the first reading of the new agreement in a 5 to 2 vote. While the revised agreement was approved on a first reading, Manitou Springs Mayor Ken Jaray tells News5 that negotiations are ongoing and the agreement could be revised again before a final vote. Jaray said the new agreement would be better for the city, but they’re still working for a deal that would be friendlier to Manitou Springs.
“We will continue conversations with the cog until the final vote and see if there are changes that can be made,” said Jaray.
The council voted 4-3 Wednesday night to continue negotiations with the Cog Railway’s ownership group.
The attraction closed in October 2017 for maintenance and repairs, which is now expected to cost roughly $100 million. The Broadmoor asked for a tax break from Manitou Springs to help incentivize the investment, and in June city council agreed that a deal was needed.
The city originally agreed to cap the excise tax revenue collected at $500,000 each year, and increasing the cap to $750,000 after 25 years. The schedule increases from $507,500 to $775,00 in the last three years of that part of the agreement. It also outlined two payments of $500,000 to cover lost tax revenue in 2018 and 2019. The agreement also outlined the donation of rail-related parts to a Cog rail museum and working together to help solve traffic and parking issues in Manitou Springs.
According to the city, the Cog Railway generates $350,000 to $500,000 in tax revenue, with an estimated $100,000 in additional sales tax revenue.
The city council is scheduled to vote again on the amended agreement on Nov. 20, Jaray said that would be the final vote.